India-Russia: News & Analysis

Philip · Post by **Philip** » 02 Dec 2014 14:33

The rupee-rouble trade should be revived. With prices low,India can make huge deals with Russia for its energy needs.This can keep oil prices stable in the country for a few years.We can work out wit Russia the storge of massive qtys. of oil and gas in similar nature as the Trinco oil tank farms,or even a tri-partite agreement with SL for the same. The contry needs to have at least a year's supply in reserves.No better time to do this when prices are low.It would spur economic growth.

Uttam · Post by **Uttam** » 02 Dec 2014 21:15

Philip wrote:The rupee-rouble trade should be revived.

Who are these traders who want to trade using Rouble. Again, I am not asking who are the jingos here who want this, I am looking for actual traders. Why would any trader want to trade in a currency that is so volatile, a currency that is not fully convertible, and faces significant political risks? Time and again traders are forced to do things that only serves the political masters (or the babus in the external affairs). Let's not get carried away by geopolitics and let the traders decide what is best for themselves.

Tuvaluan · Post by **Tuvaluan** » 02 Dec 2014 22:56

shreeman:

300 miles on a charge already is usable for commutes. energy densities continue to rise. 600 miles will kill gasoline/petrol cars.

Yes, though that may be the easier problem to solve. The other part is the rare earth/lithium required for the batteries -- they are the equivalent of crude oil when it comes to carbon-fuel engines. We already saw China playing geopolitical games on its supply to Japan in the past few years.

Cosmo_R · Post by **Cosmo_R** » 03 Dec 2014 00:44

Here's a comprehensive look at the impact of the oil price decline:

http://www.forbes.com/sites/kenrapoza/2 ... ons/print/

1. The Russian economy often pays a price for being more or less a one trick pony. Oil and gas revenues are imperative to a balanced budget. And oil prices are in decline.

2. A deficit is being budgeted for the next three years.

3. “We have a surplus despite a very difficult economic situation,” Vladimir Putin told a gathering of roughly 1,500 at Russia Calling last week. “We’re not going to raise taxes to compensate for revenue declines,” he said.

4. In order to keep that promise, Russia won’t increase expenditures, including reductions in infrastructure spending and agricultural subsidies over the next three years.

5. Meanwhile, the economic outlook for Russia will be determined by the global price of oil, domestic inflation, the depreciation of the ruble and the Ukrainian crisis, which has sanctioned Russia’s access to foreign credit.

nachiket · Post by **nachiket** » 04 Dec 2014 02:39

Austin wrote:Did you get what i said , whn.oil was USD 110 rouble was 32 now oil is 70 and rouble is 51 so budget is not impacted as ruble became 30% weaker as oil became 30 % lower and budget is in rouble not in dollar

Thats the natural equilibrim built for a full free floating currency

infact this year they hve small budget surplus , oil price lower hits investement of all oil companies it may or may not hit the budget if currency is artifically pegged at fixed rate or free floating versus dollar

How is this ever going to work? What you are basically saying is that if your export revenues go down drastically, all you have to do is devalue the currency and you won't feel anything because your budget remains same in your currency. That "budget" includes debt servicing in foreign exchange and financing imports both of which are going to become a lot costlier. And a weak currency will give an impetus to exports, but only to an extent. Oil and other raw materials are Russia's biggest exports and devaluation of the ruble is not going to suddenly increase sales.

Just think, if it was this easy, we would have had a free floating rupee a long time ago. Why do you think Chiddu and co. were in panic when the rupee dropped to ~70 to a dollar? AFter all, should make no change to the budget, since budget is in rupees and exports become cheaper.

Cosmo_R · Post by **Cosmo_R** » 04 Dec 2014 03:18

@ nachiket ^^^. Exactly.

Plus the higher cost of imported essentials causes consumers to tighten spending on locally produced durables. driving down tax revenues etc.

One thing we in India should keep in mind is that like it or not, military programs will be triaged. It's going to be a tradeoff between Borei class subs and PAK/FA. THey will be looking to us to foot the bill even as they sell stuff to our adversaries.

nachiket · Post by **nachiket** » 04 Dec 2014 03:25

The Russian Central bank has increased interest rates recently to arrest the decline of the Ruble, despite growth being low at the moment. They wouldn't be doing this if the fall in thr Ruble's value wasn't affecting them as Austin seems to be saying. Russia imports a lot of consumer goods. They are going to become costlier and mango people are going to feel the pinch. They aren't going to care that "Budget in Ruble terms" is unaffected.

An unstable exchange rate can also lead to capital flight, further complicating the situation.

geeth · Post by **geeth** » 04 Dec 2014 03:29

How is this ever going to work?

By pumping more oil into market..it will have a spirallind downward effect on price which will hurt all exporters of oil.

Suraj · Post by **Suraj** » 04 Dec 2014 07:35

nachiket wrote:How is this ever going to work? What you are basically saying is that if your export revenues go down drastically, all you have to do is devalue the currency and you won't feel anything because your budget remains same in your currency. That "budget" includes debt servicing in foreign exchange and financing imports both of which are going to become a lot costlier. And a weak currency will give an impetus to exports, but only to an extent. Oil and other raw materials are Russia's biggest exports and devaluation of the ruble is not going to suddenly increase sales.

Just think, if it was this easy, we would have had a free floating rupee a long time ago. Why do you think Chiddu and co. were in panic when the rupee dropped to ~70 to a dollar? AFter all, should make no change to the budget, since budget is in rupees and exports become cheaper.

It works when you're a resource rich exporter, and the exports provide a signfiicant share of your budget revenues. That's not something we are. When people refer to 'Russian budget is based on $100 oil' the first counter question is, 'at what RUB:USD exchange rate ?' . Their budget is in Rubles. The west is simultaneously trying to squeeze the Russians by lowering oil prices *and* weakening the Ruble, they're basically acting at cross purposes, because the Russians get the same number of Rubles out of it.

The Russians don't need to devalue much . That's already been done:

There's a very close relationship between the extent of devaluation to the falling price of oil. The above data suggests that budgetary revenue hit would not be significant. Their growth would be hampered due to lower sales to EU, who are struggling, and who are also the largest consumers of Russian hydrocarbons. When western EU picks up, Russia will pick up along with it, in my opinion. The current western approach involving Russia looks like cutting off their nose to spite their face.

As for debt, it's not usually paid right away; with softening western growth, interest rates remain subdued, allowing the Russians to roll over debt to lower rate terms. Not all external debt is bad. For example, Indian NRE accounts add to Indian external debt, because they are repatriable. If Russian banks have such deposits that add to paper external debt, they're also in a position to cut rates on them to lower their interest load. I don't have evidence that substantial Russian debt is the speculative short term hot money of the kind that decimated SE Asia, considering the MICEX has been a fairly poor performer all year - the hot money has therefore already left some time ago.

nachiket · Post by **nachiket** » 04 Dec 2014 08:00

Thanks Suraj. That's why I requested you to post here. Now I have some questions.

Suraj wrote: It works when you're a resource rich exporter, and the exports provide a signfiicant share of your budget revenues. That's not something we are. When people refer to 'Russian budget is based on $100 oil' the first counter question is, 'at what RUB:USD exchange rate ?' . Their budget is in Rubles. The west is simultaneously trying to squeeze the Russians by lowering oil prices *and* weakening the Ruble, they're basically acting at cross purposes, because the Russians get the same number of Rubles out of it.

Yes, I understand that they will get the same number of rubles, but the instrinsic value of each Ruble has reduced hasn't it? They have become poorer in Dollar terms, and they need Dollars to finance their imports. I don't understand why it is important what they are exporting - resources or finished goods. For example say if finished Textile exports were as important to us as oil is to the Russians, and the price of textiles in the international market collapsed because of increasing competition, would we get the same benefit if the Rupee is significantly devalued?

Also, this doesn't explain why the Russian Central bank is actively trying to arrest the slide by increasing interest rates, even during a period of very low growth and with a recession looming large. If the devaluation wasn't really affecting them, they wouldn't bother.

As for debt, it's not usually paid right away; with softening western growth, interest rates remain subdued, allowing the Russians to roll over debt to lower rate terms. Not all external debt is bad. For example, Indian NRE accounts add to Indian external debt, because they are repatriable. If Russian banks have such deposits that add to paper external debt, they're also in a position to cut rates on them to lower their interest load. I don't have evidence that substantial Russian debt is the speculative short term hot money of the kind that decimated SE Asia, considering the MICEX has been a fairly poor performer all year - the hot money has therefore already left some time ago.

They are increasing rates, not cutting them. Agree with the rest.

Suraj · Post by **Suraj** » 04 Dec 2014 09:51

nachiket wrote:Yes, I understand that they will get the same number of rubles, but the instrinsic value of each Ruble has reduced hasn't it? They have become poorer in Dollar terms, and they need Dollars to finance their imports.

They run a huge trade surplus, quoting the Central Bank of Russia data:
Balance of Payments of the Russian Federation for January-June of 2014
Oil vs non-oil export data
Annualized good trade surplus of over $200 billion. They run a services trade deficit, but the problem is that squeezing Russia also lowers their trade deficit because they can't import as much.

nachiket wrote:I don't understand why it is important what they are exporting - resources or finished goods. For example say if finished Textile exports were as important to us as oil is to the Russians, and the price of textiles in the international market collapsed because of increasing competition, would we get the same benefit if the Rupee is significantly devalued?

If textiles account for a huge part of our exports (say 30-45%), are denominated in dollars, and the Rupee devaluation tracks the fall in prices, we would. In fact that's what we did for long - we kept devaluing the Rupee to stay competitive.

nachiket wrote:Also, this doesn't explain why the Russian Central bank is actively trying to arrest the slide by increasing interest rates, even during a period of very low growth and with a recession looming large. If the devaluation wasn't really affecting them, they wouldn't bother.

They're targeting inflation, not their exchange rate. That inflation in turn was due to Russian efforts to limit imports from western nations, and buying up dollars to weaken the Ruble, so that they can balance the budget in the face of falling oil prices. In the short term, they're doing the right thing. When you're the world's top hydrocarbon exporter, it is in your interest to let your exchange rate track the price of your primary export.

Cosmo_R · Post by **Cosmo_R** » 04 Dec 2014 17:47

@ Suraj: "Their budget is in Rubles. The west is simultaneously trying to squeeze the Russians by lowering oil prices *and* weakening the Ruble, they're basically acting at cross purposes, because the Russians get the same number of Rubles out of it. "

They are going to sell less oil at a lower price but get the same number of rubles. By 'getting' rubles means leeway to increase money supply. Else they could just print the rubles. At the same time however, they are increasing rates to stem the ruble's decline which is at cross-purposes with the leeway to increase/maintain money supply.

Selling less oil has ripple effects in the economy. Less demand for inputs that enable the sale of oil, That leads to lower need for workers and translates into lower sales at retail etc. In short, the GDP starts to shrink and along with it, tax receipts.

In the short term, this can be juggled but medium and long term it is not sustainable. Looming in the background is what no one wants to talk about: banks.

When we eventually find out that the banking system has been lending rubles for local investment against foreign currency liabilities, that's when we have an August 1998 potential.

Austin · Post by **Austin** » 04 Dec 2014 18:06

They are not selling less oil they are selling the same oil YoY which is around 520 odd Million Tons , They dont just have big deal with Europe but also with China where they sold good amount of oil only to be superseded by Gas and these Oil/Gas Deals with Europe and China are long term one not random spot selling.

Most likely we would too see some Oil/Gas deal when Putin visits India , They are any way moving away from Europe to Asia long before this crisis came about but with crisis they would just speed it up.

Asia it seems is very profitable for LNG business.

Austin · Post by **Austin** » 04 Dec 2014 18:06

Russia, India to sign about 15 agreements during Putin’s visit – Alexander Kadakin

Philip · Post by **Philip** » 04 Dec 2014 18:10

Putin has addressed the Russian people in a state of the nation address today.A rousing speech in which he defended Russian actions in the Crimea,western interference in border states with Russia and compared the Crimea as Russia's "Temple Mount", He was also heavy on eco issues and said Russia should be more self-reliant and not depend upon western investors,etc. It will be interesting to see what deals are reached with the GOI as we too reportedly do not want to see Russia drawn into an embrace with the Chinese which the West is achieving with t heir sanction policies.

Austin · Post by **Austin** » 04 Dec 2014 18:13

ONGC to acquire stake in two Siberian oilfields

Austin · Post by **Austin** » 04 Dec 2014 21:41

India hopes Putin’s visit to Delhi to impart new dynamics to cooperation

MOSCOW, December 4. /TASS/. India hopes Russian President Vladimir Putin’s forthcoming visit to New Delhi will impart new dynamics to Russian-Indian cooperation, the Indian ambassador in Moscow, P.S. Raghavan said on Thursday.

Relations between India and Russia can be described as vibrant and they have been marked by close cooperation on the basis of friendship and trust for many decades, the ambassador said.

He noted the new dynamism that these intentions had acquired new dynamism in the past several years after the formation of the new cabinet. It could be seen in many areas of cooperation.

India and Russia have a tradition of organizing annual summits alternately in either of the two countries, Dr. Raghavan said. “This tradition was founded by Vladimir Putin when he visited India for the first time.”

Over the past six months, the Indian Prime Minister has had two opportunities to meet with Vladimir Putin - at the BRICS summit in Brazil and at the G20 summit in Australia.

Cooperation between India and Russia covers all the spheres of human activity from politics to atomic energy, defense, space exploration, science, technologies, culture and trade, Raghavan said.

The forthcoming talks will make it possible for the Russian and Indian leaders to map out new guidelines for collaboration and to boost the spheres where the ties are not developed sufficiently for the time being, he said.

Earlier reports spoke of the two sides’ readiness to sign more than fifteen intergovernmental agreements on cooperation during the visit, the dates and details of which were still being discussed.

Ambassador Raghavan confirmed on his part that the package of documents to be signed in New Delhi included more than fifteen documents.

Suraj · Post by **Suraj** » 04 Dec 2014 22:03

Cosmo_R wrote:They are going to sell less oil at a lower price but get the same number of rubles. By 'getting' rubles means leeway to increase money supply. Else they could just print the rubles. At the same time however, they are increasing rates to stem the ruble's decline which is at cross-purposes with the leeway to increase/maintain money supply.

As Austin mentioned, supply hasn't changed as much as spot prices. the Russians responded by tracking the decline through a weakening of their currency. They do this by buying dollars out of the open market and exchanging them with rubles. This has the side-effect of driving up inflation through an increase in the monetary base. They can address this to an extent through the issue of sterilization bonds, but that's not an open-ended solution. Another option is to raise rates, which they're also doing. Additionally, inflation is being driven by their squeeze on western imports - too much money chasing too few imports.

Cosmo_R · Post by **Cosmo_R** » 05 Dec 2014 00:01

"Some experts have suggested that the Kremlin is happy to let the ruble fall as a way of maximizing revenues as the price of oil — on which Russia depends for half its budget revenues — plunges. A one ruble increase in the dollar’s exchange rate boosts government revenues by about 200 billion rubles.
http://www.themoscowtimes.com/business/ ... 12518.html

It's the other half of budget revenues that I am focusing on. Devaluation will hurt those revenues.

Suraj · Post by **Suraj** » 05 Dec 2014 00:17

Why would devaluation hurt other revenues ? Ooil constitutes half of budget revenues. Oil is denominated in dollars. By equalizing the fall in oil price with a corresponding devaluation in the RUB:USD rate, they keep their budgetary revenues from oil stable. The other half is revenue from the domestic tax base, which is not directly linked to the price of oil or any other externally priced commodity and therefore is largely unaffected by the exchange rate. Even the effect of inflation and slower growth balances each other out - lower growth may result in lower real revenues, but the inflation increases nominal revenues anyway. Of course, none of this is sustainable in perpetuity, but the current oil price situation is not either.

RajeshA · Post by **RajeshA** » 05 Dec 2014 02:29

arun wrote:Mohammadden Terrorists go on a killing spree in Grozny in Russia leaving 10 Police Officers dead.

“Six “bandits” had been destroyed, dying “a dog’s death” in the Press House in the centre of the city”:

At least 19 people dead as Islamists clash with police in Chechnya

This is an appropriate backdrop to President Putin's visit to India. May be Putin can suggest some ways of how to get rid of this plague!

Cosmo_R · Post by **Cosmo_R** » 05 Dec 2014 03:42

Suraj wrote:Why would devaluation hurt other revenues ? ...Of course, none of this is sustainable in perpetuity, but the current oil price situation is not either.

Suraj, you know your economics. The key is it seems to work in the very short run but it wont work for more than 3-6 months. Things start piling up. Example Russian banks who have ruble assets funded by foreign currency liabilities get squeezed not just by the exchange rate but by heightened risk thresholds of foreign lenders and they start contracting lending in addition to the government tightening to keep the budget in line.

Nothing works in perpetuity of course, but when you the level of debt that the Russian economy carries (August 1998), it does not take that much to precipitate events.

The Saudis have already announced they can live with $60/bbl oil in order to maintain market share and even a special price for the US. The Shale oil guys will not sit still, they will ride the average cost curve down because they have debt payments to make. The US is also likely to lift the oil export ban.

The world is swimming in oil. Nobody expected Libyan oil production to get 1MM/bbl/day.

I any event, Putin is coming with sweetheart offers of participation in Sakhalin fields (at high profit oil prices) and even sweeter offers of 'ToT' on PAK/FA

Suraj · Post by **Suraj** » 05 Dec 2014 04:35

Cosmo_R wrote:The key is it seems to work in the very short run but it wont work for more than 3-6 months. Things start piling up.

The same applies to the price of oil. It's clearly artificially manipulated, and someone is paying a price to try and screw the Russians, which IMHO, isn't really having the effect that's intended. Core EU countries are flailing economically, and by shooting themselves in the foot now, they're jeopardizing their long term access to Russian energy. This winter is slated to be harsher than usual, which won't help.

Sweden is already facing a political crisis. The Norwegians, Dutch and Brits and their welfare systems will all hurt a bit from the price of oil falling, unless they devalue accordingly (which they haven't).

Russia is a big country, with a lot that it can dig out of the ground and sell. While short term economic issues may occur, it's a fact that a country with a huge pool of hydrocarbon energy has a very big economic backstop in its favour.

Cosmo_R · Post by **Cosmo_R** » 05 Dec 2014 05:00

OK Suraj, Russia is different. Rules are different

Austin · Post by **Austin** » 05 Dec 2014 07:53

Foreign investment funds involved in attack on ruble, says foreign intelligence chief

“No one wants to see a strong and independent Russia” he said

MOSCOW, December 4. /TASS/. The U.S. and its allies are seeking to change state power in Moscow through sanctions and attacks on the ruble and the oil price, Mikhail Fradkov, the director of Russia’s Foreign Intelligence Service said in an interview with Bloomberg on Thursday.

“Such a desire has been noticed, it’s a small secret” he said. “No one wants to see a strong and independent Russia.”

Foreign investment funds are tightly involved in the ongoing jobber attack on the Russian ruble and they are taking part in it via intermediaries.

“Any speculation has specific schemes and the schemes have a number of participants,” he said.

Fradkov also believes that a decline of more than 30% in oil prices is caused partly by U.S. actions, which aim to force Russia to focus entirely on the solution of its domestic problems.

Russian President Vladimir Putin said in his annual state-of-the-nation address earlier on the same day the Russian authorities knew who was behind the bearish play against the ruble. He demanded that the Finance Ministry and the Central Bank of Russia /CBR/ punish the jobbers by every means possible.

Putin said the CBR had enough instruments for this, although he made no further specifications.

Austin · Post by **Austin** » 05 Dec 2014 08:06

Suraj wrote: As for debt, it's not usually paid right away; with softening western growth, interest rates remain subdued, allowing the Russians to roll over debt to lower rate terms. Not all external debt is bad. For example, Indian NRE accounts add to Indian external debt, because they are repatriable. If Russian banks have such deposits that add to paper external debt, they're also in a position to cut rates on them to lower their interest load. I don't have evidence that substantial Russian debt is the speculative short term hot money of the kind that decimated SE Asia, considering the MICEX has been a fairly poor performer all year - the hot money has therefore already left some time ago.

Some inter-company transaction inflates those figures the link below details some of it

Fears of a Russian credit crunch greatly exaggerated, say analysts

wasu · Post by **wasu** » 05 Dec 2014 08:33

Alrosa may enter into contract with Indian traders

http://economictimes.indiatimes.com/ind ... 378810.cms

KOLKATA: The stage could be set for a transformation of the global diamond trade next week as Russia hastens to beat the imposition of sanctions over its actions in Ukraine, turning India into a key hub for the precious stones alongside dominant Antwerp and centres such as Dubai and Hong Kong.

..Currently, most of the diamonds meant for cutting reach India through trade hubs in Antwerp, Dubai, Tel Aviv, London, New York and Hong Kong. The presence of middlemen adds to costs for diamond manufacturers and jewellery makers and thereby, the end consumer. Such costs are estimated at about 7.5% in a trade valued at more than Rs 1 lakh crore in FY14. Given that India cuts and polishes 85% of the rough diamonds produced in the world, any deal with Russia would therefore make for substantial savings.

Suraj · Post by **Suraj** » 05 Dec 2014 09:41

Cosmo_R wrote:OK Suraj, Russia is different. Rules are different

It is not my contention that Russia is not facing any problems. They certainly are on a sticky wicket. I simply stated that the oil prices are not likely to be the main cause of budgetary pain. The other capital restrictions would have a greater effect. Paradoxically, with the US increasingly turning into one of the main oil producers, they're themselves likely to be hurt more, because their fracking costs haven't been fully amortized and therefore cannot sustain low oil prices very long. Further, the US cannot devalue the way Russia can, because oil is priced in dollars. This leads greater credence to the argument that this is an OPEC move to squeeze the US shale/fracking producers.

Shanmukh · Post by **Shanmukh** » 06 Dec 2014 10:52

Putin to skip addressing Indian Parliament due to his busy schedule.

http://indiatoday.intoday.in/story/puti ... 05463.html

Is that the real reason, or is there a deeper, more unpalatable one?

Shreeman · Post by **Shreeman** » 06 Dec 2014 11:08

^^^ There is a certain amount of weirdness coming out of Russian actions/news of late. Inexplicable, wonder what's brewing.

krishnan · Post by **krishnan** » 06 Dec 2014 11:56

Nothing to say in parliament , and i doubt he is in any mood for this. He probably would have thought of calling this visit off, but things are diff now for india

RSoami · Post by **RSoami** » 06 Dec 2014 13:18

Perhaps he is not interested in symbolism. Perhaps he is not happy over many of the defence contracts going the western way. Tough to know.

I was wondering what would be Bharats reaction if Russia asks India to threaten France that it is reconsidering the Rafale deal in view of the utter unreliability of the French to deliver the Mistrals !!!

kmkraoind · Post by **kmkraoind** » 06 Dec 2014 13:32

RSoami wrote:Perhaps he is not interested in symbolism. Perhaps he is not happy over many of the defence contracts going the western way. Tough to know.

I was wondering what would be Bharats reaction if Russia asks India to threaten France that it is reconsidering the Rafale deal in view of the utter unreliability of the French to deliver the Mistrals !!!

Then India should say "We can deal Bakis on our own. We need Rafales to deal with China, if you stop giving Chinese, Sukhois, S-400s, even stop supplying RD-93 engines, in one word, if you cut military ties with China, then we will stop buying Rafales. Ball is in your court, you decide."

Shreeman · Post by **Shreeman** » 06 Dec 2014 13:35

Not speaking to US congress (Modi) or Parliament (Putin) has no real meaning by itself. Putin could show up any day and give a speech. The Indian parliament is not that busy.

Russia is showing weirdness in reshaping its relations (eg Gorbachev has opened his mouth), the Pakistan, china, turkey visits, early leaving at G20, etc have had an effect. Chances are the Russian visit may be shaping up to be leaner than Obama. Thus, a shorter, busier schedule. Otherwise, except for the president and the PM, Putin doesnt need to talk to anyone ahead of the parliament.

But there are shades of deeper interactions that seem to indicate more may be afoot for Russia, unrelated to India. Grozny was quiet, Dagestan was off the map. There is a lot of language from Moscow that is just very unusual ("will not stop cooperating with US at any cost").

Something is afoot.

Yogi_G · Post by **Yogi_G** » 06 Dec 2014 13:38

I stand for India standing by Russia on the Mistral deal. We cannot do this overtly though. two mangoes, one stone.

RajeshA · Post by **RajeshA** » 06 Dec 2014 14:08

It is a pity that Putin has given up on building up Russian soft-power.

Shreeman · Post by **Shreeman** » 06 Dec 2014 14:24

Putin, or anyone else in Russia for that matter, doesnt really have a choice. alea jakta est.

Re. India, it does not have a voice. India is not china. Or Japan. India believes in having its balls trapped equally in every vise. China via Pakistan, Bangladesh, even Sri Lanka. France via not just Rafaile, but miraje and countless other screwdriver items. Russia via entire Army/navy/air force. And now the US via the other half of the hardware.

So, India will abstain. Take the middle road. Speak softly. Be non-committal. That is all India can do.

Russia might be asking for more vocal support. There has been no noise by India at any level during these developments.

member_20317 · Post by **member_20317** » 06 Dec 2014 15:52

Yogi_G wrote:I stand for India standing by Russia on the Mistral deal. We cannot do this overtly though. two mangoes, one stone.

Cannot happen should not happen IMO.

Russia is still caught up in the past. Our relationship should be valued and not merely as a useless, softie-softie, goody two shoes statement of wishes.

The problem with the Russians is that they still believe that they are a pole in the world. What they fail to understand is that China does not need Russia to take on US in a crunch situation just like US does not need India to take on China in a crunch situation between them. Russia always had a thing, to get India and China on the same side. But our differences are far too much. In fact even the US fails to realize that India and China being antagonistic, does not imply that India is going to give up its own interests to be able to push American ones. India China rivalry is a multi-generational, multi-dimensional affair that is going to stretch into centuries and both the countries have core interests that are too large in scale and scope. US and Russia are merely tails trying to wag the dogs trying to impress a few easy converts with their 70 year rivalry (a near fake rivalry at that). European rivalries were real rivalries that resulted in real changes and wars that changed everything. US-SU and now US-China are just good cop bad cop arrangements that are designed to not end up in wars and civilization level changes. These are fake stances to induce brain-splits, in the rest of the world. Russia is now like us, turd world people who should be wary of this farce. They are today a potential victim of these fake rivalries.

If anything Russians should be equally wary of China as they are of Americans. Only difference between the Chinese approach and American approaches to the Russians is that one is actively trying to subvert Russia today and the other one is waiting behind the curtains with his own set of knives. In the case of India the roles taken on by US and china reverse the other way.

I think Putin is considerably edgy right now and India should do nothing to weaken him. He has been fighting a justifiable but tough war all through his career and these constant wars take an unseen toll on the leaders. We have a new team in India which has barely started and it makes no sense to hard-bet on Putin. Any overplay from us may actually end up damaging both Russia and India. Indian choices will shrink while Putin due to his fatigue, may in turn try something silly (and commit mistakes). All the two biggies (US and China

) have to do is make subtle changes in their respective stances and keep Russia in trouble. People see US and China as rivals while I personally see both as merely new colonizers trying to barter away the world between themselves with the US currently trying to have doctored opposition installed in the form of China and China in turn is trying to gain Russia+Central Asia+Iran (and perhaps Germany) by keeping Russia dependent on itself. It does not serve our interest to have Russia in the Chinese stable and it does not serve Russia's interest to have India in the American stable. There was a time when non-alignment was housed with loonies and outside supported by Soviets. Russians will have to learn to deal with their demons based on their own capacity and we will have to learn to do the same on the basis of our own capacity. It is time that the nature of BIRCS itself is changed such that India, Russia and Brazil take up more capability in remaining independent.

My wish list -
1) Explore new joint weapons development projects and deepen the scope of existing ones (new nuke reactors for naval usages),
2) look for oil deals (that thick line you see bye-passing India and into mallaca, should be replicated for India linked backwards into Iran and Central Asia with pipelines delivering till charbahar),
3) get Vietnam in the same category as India (wary of China but sourcing weapons from both US and Russia),
4) get Iran out of the isolation and develop it into another Vietnam on its way to be another India (Gwadar etc are dead because Baki good health is necessary to make it work and with both America and China inside Pakistan there is no hope in hell for Pakistan, besides the back link to china will remain under threat from India forever. In such a case, Iran becomes a lucrative must have linked back to CA. This kind of linkage will give confidence to Iran too.)
5) develop cooperation to ensure Central Asia is risk freed for future,
6) develop a complementary-supportive strategy for dealing with south-east asia (basis Vietnam and Thailand),
7) get south america to think instead of fornicate by taking BRICS bank to them,
8 ) both sides substantially increase their respective investments in Humint and strike up cooperation.

This should result in the world becoming 3 legged again (2 leggedness results in wars and 1 leggedness results in total exploitation). Russians are already doing the right things around their borders and India should start something similar around ours, with both parties focusing on keeping the big guys out of our respective near abroad. Towards that end both sides should free up the other, to weapons trade with such countries, which may be rivals for the other.

We Indians (also Russians) should try to figure, what kind of a world would force the Japanese to stop being a munna (weakend US and stronger China!? I don't know for sure).

For Reference:

Austin · Post by **Austin** » 06 Dec 2014 16:13

nageshks wrote:Putin to skip addressing Indian Parliament due to his busy schedule.

http://indiatoday.intoday.in/story/puti ... 05463.html

Is that the real reason, or is there a deeper, more unpalatable one?

Bad decision I think he should have done that ......Not that Parliament is critical to Foreign Policy for GOI of the day and its mostly the PM of the day that takes the decision but in good faith he should have.

These Indian-Russian visit are just very short , Perhaps the babus would have done the background work and all the leaders do is talk for few hours and sign the agreement.

They should alteast have 2-3 days visit , Nothing specific to putin but AFAIK this was the case with Gorbachev visited India , Same with Yeltsin , Medvedev and Putin.

But then in the end what matters is the substance part of it ....as long as there is more Teeth ,substance and quality to the visit and agreements signed then even half day visit would do.......else

even 3 day visit is mostly media tamasha in India with what the President ate , how he slept , whats the body language like , did he smile or not , whats his favourite colour and food is etc etc

Mukesh.Kumar · Post by **Mukesh.Kumar** » 06 Dec 2014 17:43

OK, this is going to be a ramble. Been following this forum for quite some time and seen the agonizing and heartburn over Indo-Russian relationship (Kind of reminds me of the way Brits agonize over their special relationship with their cousins across the Atlantic).

Over time we have swung from calling the Russians our saviors to opportunists. Even today we on the forum get riled up as to what's happening. Be it Russians supporting Chinese aircraft program with engines, supplying hardware to Pakistan.

Let's be clear on one thing, no country will do anything that is not in its national interest. Soft power, Track II people to people contacts be damned.

With this in mind let's analyze and try to answer the following questions. I am sure if we can honestly and correctly analyze the following then we will get a grip on how much Russia will support India vs the others. And therein will lie the heart of what we need to do?

1) Why is Russia afraid of Western encirclement? What evidence do we have from Russian sources (BRF equivalents) that support answers?
2) Is Russia strong enough to face off Western encirclement alone? What evidence do we have from Russian sources (BRF equivalents) that support answers? What are they thinking?
3) What can China offer Russia? What are quantifiable cons of deepening their relationship in each field? What are possible timelines? What are areas of convergence of interest? What are areas of divergence?
4) What can India offer Russia? What are the cons? What are areas of convergence of interest? What are areas of divergence?
5) Why did Russia refuse to cooperate with Pakistan till now? What has changed? What can cooperation guarantee? What are the fall-outs?
What are India's levers on Russia? What are Russia's levers on India?

Rather than have opinions let's see if we can structure this out. Would the forum be interested in doing a compilation on this?

Am badly caught up in work in the year-ending process, cannot tackle this all on my own. Would any of the guru's volunteer to help with this compilation? We can split up the questions, plan a work allocation and get it done in a short time if people are interested.